Not content with the blow it has dealt to US oil drillers, Saudi Arabia is set to escalate the battle for market share by raising production to maximum levels.

The world's largest oil exporter has already increased output to a 30-year high of 10.3m barrels a day in a bid to check growth from nations including the US, Canada and Brazil.

It will add even more to the global glut, according to Goldman Sachs. Citigroup predicts the kingdom will push toward its maximum daily capacity, which the bank estimates at about 11m barrels, in the second half of 2015.

Saudi Arabia steered the Organisation of Petroleum Exporting Countries (Opec) in November to protect its market share in the face of swelling US crude output, rather than cut supplies to shore up prices, as it did in the past.

Having abandoned the role of swing supplier - adjusting production in line with demand - the kingdom will maximise sales to increase pressure on producers outside the group, the banks said.

"If you are Saudi Arabia and you're looking at the new oil order we live in, you would go to full capacity," said Jeff Currie, head of commodities research at Goldman Sachs in New York.

"The world has come around to the realisation that the US shale barrel is the swing barrel."

As result of Saudi pressure, North American drillers have reduced the number of operating oil rigs for a record 27 weeks to the lowest level in almost five years, according to Baker Hughes - and oil stockpiles have shrunk as well.

Brent crude plunged to a six-year low of $45.19 a barrel in January following Opec's refusal to cut production. The international benchmark has rebounded about 40pc since then with the slowdown of hydraulic fracturing in US shale formations.

Opec agreed on June 5 to retain its collective output target of 30m barrels a day, although it has surpassed that level for 12 months straight, according to data compiled by Bloomberg.

Global supply exceeded demand by 1.8m barrels a day in the first quarter, said the International Energy Agency (IEA).

While most of Opec's 12 nations are already producing at maximum levels, Saudi Arabia - the biggest member and leader of the group's market strategy - has, for years, kept fields in reserve capable of producing millions of barrels a day, to be deployed during times of supply disruption.

But the incentive to keep holding this spare capacity is waning, according to Citigroup.

Estimates vary on how high Saudi production might go. The Saudi oil minister said his country has about 1.5m to 2m barrels of daily reserve capacity and is ready to increase output if demand rises.

The IEA, a Paris-based adviser to industrialised nations, assesses the full capacity at 12.3m. Saudi Arabia's decision not to push beyond 10m during the 2011 crisis in Libya suggests the maximum is closer to 11m.

"The clear implication of Saudi Arabia's new oil policy of pressuring high-cost producers is for them to increase production and exports," said Seth Kleinman, head of energy strategy at Citigroup. "With an increasingly compelling picture of lower oil prices over the next 10 to 20 years, it makes sense for Saudi to use it all and use it now."